01—Abstract
Summary
Summary of the 10-Q filed April 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Sysco Corporation's third-quarter fiscal 2026 10-Q (quarter ended March 28, 2026) shows sales of $20.5 billiona, up 4.7% from the prior-year quarter, driven primarily by volume improvements.
Operating income fell 9.1% to $619 millionb and net earnings fell 15.2% to $340 million, or $0.71 per diluted share, with the company citing higher incentive compensation, increased restructuring and transformational project costs, and higher acquisition and due diligence costs. On an adjusted basis (excluding Certain Items), adjusted operating income declined 0.6% and adjusted diluted EPS declined 2.1% to $0.94. For the first 39 weeks, sales rose 3.6% to $62.4 billion, net earnings fell 7.0% to $1.2 billion, and adjusted diluted EPS rose 3.4% to $3.08.
Net cash from operating activities was $1.46 billionc and free cash flow was $1.13 billion for the 39-week period. The most significant development is the proposed acquisition of Jetro Restaurant Depot (JRD), agreed on March 30, 2026, for approximately $29.1 billion, consisting of about $21.6 billion in cash and 91.5 million Sysco shares, with JRD's equity holders expected to own about 16% of Sysco's outstanding common stock afterward. The cash portion is to be financed through new senior unsecured notes, hybrid debt, cash on hand, and equity or equity-linked securities, supported by a commitment letter for a $22 billion bridge facility that has been reduced to $19 billion following a $3 billion delayed draw term loan.
Sysco has suspended share repurchases for the remainder of fiscal 2026 in connection with the transaction, and a termination fee of $1.164 billiond applies if the deal fails on regulatory grounds. The transaction is expected to close by the third quarter of fiscal 2027.
Debt rose to $14.0 billion from $13.3 billion at fiscal year-end, mainly from a $1.25 billion senior notes issuance in February 2026. Total shareholders' equity was $2.3 billion at March 28, 2026, and the company declared a quarterly dividend of $0.55 per share for the fourth quarter of fiscal 2026.
02—Key points
Key Highlights
- Sales increased 4.7% to $20.5 billion in the third quarter, with U.S. Foodservice case volume up 2.3% and local case volume up 3.3%.
- GAAP operating income declined 9.1% to $619 million and net earnings declined 15.2% to $340 million; adjusted diluted EPS declined 2.1% to $0.94.
- For the 39-week period, sales rose 3.6% to $62.4 billion, adjusted diluted EPS rose 3.4% to $3.08, and free cash flow was $1.13 billion.
- Sysco agreed on March 30, 2026 to acquire Jetro Restaurant Depot for about $29.1 billion ($21.6 billion cash plus 91.5 million shares), with a $1.164 billion termination fee if regulatory clearance fails.
- A $22 billion bridge loan commitment, reduced to $19 billion after a $3 billion delayed draw term loan, supports the cash portion of the JRD purchase; $6.3 billion of deal-contingent interest rate locks have also been executed.
- Share repurchases have been suspended for the rest of fiscal 2026 in connection with the proposed transaction; $200 million was repurchased in the first 39 weeks.
- Total debt rose to $14.0 billion from $13.3 billion, driven by a $1.25 billion senior notes issuance in February 2026, and the quarterly dividend was raised to $0.55 per share for the fourth quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Sysco kept $0.02.
- Revenue$20.52B100.0%
- Cost of revenue−$16.71B81.4%
- Gross profit$3.81B18.6%
- Operating costs−$3.19B15.6%
- Operating income$619.0M3.0%
- Interest, other & tax−$279.0M1.4%
- Net income$340.0M1.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed April 29, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $20.52B$19.60B | +4.7% |
| Cost of Revenue | $16.71B$16.02B | +4.3% |
| Gross Profit | $3.81B$3.58B | +6.5% |
| Operating Expenses | $3.19B$2.90B | +10.1% |
| Operating Income | $619.00M$681.00M | −9.1% |
| Net Income | $340.00M$401.00M | −15.2% |
| EPS (Basic) | $0.71$0.82 | −13.4% |
| EPS (Diluted) | $0.71$0.82 | −13.4% |
| Shares Outstanding (Basic) | 479.34M487.52M | −1.7% |
| Shares Outstanding (Diluted) | 481.19M489.33M | −1.7% |
05—Questions
Frequently Asked Questions
How did Sysco perform in the third quarter of fiscal 2026?
Sales grew 4.7% to $20.5 billion, primarily driven by volume. However, operating income fell 9.1% to $619 million and net earnings fell 15.2% to $340 million, or $0.71 per diluted share. Management attributed the decline mainly to higher incentive compensation, increased restructuring and transformation costs, and higher acquisition and due diligence costs. Excluding these Certain Items, adjusted operating income fell 0.6% and adjusted diluted EPS fell 2.1% to $0.94.
What is the Jetro Restaurant Depot acquisition?
Sysco agreed on March 30, 2026 to acquire JRD, a U.S. wholesale cash-and-carry foodservice provider operating 167 large-format warehouse stores across 35 states. The purchase price is about $29.1 billion, comprising roughly $21.6 billion in cash and 91.5 million Sysco common shares. The transaction is expected to close by the third quarter of fiscal 2027, subject to customary conditions including Hart-Scott-Rodino regulatory clearance.
How will the cash portion of the JRD acquisition be financed?
The filing says the cash portion is expected to be financed through a combination of new senior unsecured notes, hybrid debt, cash on hand, and equity or equity-linked securities. Sysco has a $22 billion 364-day bridge loan commitment, reduced to $19 billion after a $3 billion senior unsecured delayed draw term loan facility was added. Fees of $88 million had been paid upfront for the facility as of April 10, 2026.
How is Sysco's liquidity and capital allocation changing?
Sysco had $1.9 billion in cash and cash equivalents at March 28, 2026, and total debt of $14.0 billion, up from $13.3 billion at fiscal year-end after a $1.25 billion senior notes issuance. The company has suspended share repurchases for the remainder of fiscal 2026 in connection with the proposed transaction, with $1.3 billion remaining under its authorization. It declared a fourth-quarter dividend of $0.55 per share and entered a new $3.0 billion revolving credit facility on April 16, 2026, which will increase to $4.0 billion after the JRD acquisition closes.
What are the main risks tied to the pending JRD transaction?
The filing identifies the risk that the transaction is not completed as expected, in a timely manner, or at all, and notes a $1.164 billion termination fee payable under certain circumstances. It also cites business uncertainty during the pending period, potential negative publicity, diversion of management time, and the risk that anticipated benefits are not realized within the expected timeframe. The company also notes the addition of interest rate risk from the transaction.
06—Continue